Originally Posted by alanbol
1. It was management that gave unions what they negotiated for. MANAGEMENT. And now they're shocked. Shocked! that employees grow old and retire. Instead of taking money and setting it aside for future pension and medical expenses, they gave it away to shareholders as dividends or held on to it to prop up the illusion of earnings. Why? Because exec. pay is usually paid to stock price. Duh. I'm sorry you guys don't feel that factory workers deserve a decent wage. I think they do. Teachers, too. (That ought to get somebody going, eh?).
A couple of things in here need to be addressed.
1) Management acquiesced to Union demands.
Absolutely true, and completely and utterly management's fault. When I talk about wanting bankruptcy for the US Big 3, I am advocating punishing BOTH unions AND management. The management should have to account for their failures, as must the union leadership. And I'd like to have a discussion that calls out union leadership, not rank and file union employees.
2) Union mandated pensions are what is killing businesses that are beholden to union labor contracts. Therein lies the real human dilemma of all this talk about 'union-busting.' It's one thing to renegotiate labor contracts, scale back what current employees make, and what they will receive as a pension. It's another thing, and a tragic thing, to retro-actively break a promise you made to someone who fulfilled their obligation to you.
By my personal and professional values, these union-busting activities should guarantee existing benefits for retirees. They should do as much as they can to keep the benefits for existing employees based on seniority. If you were working for 15 years with the assumption you were getting pension X with benefits Y, restructuring should ... let me rephrase that... MUST do its utmost to honor those obligations before any others.
Nevertheless, union leadership refused to renegotiate pension benefits time and again for new employees. At a time when the rest of the US business world was assigning "retirement and pension" planning to employees as a personal obligation and responsibility
the UAW was unwilling to do so. It is the accumulation of this pension obligation that has had the largest impact on cost of doing business. In business there are two types of cost categories: Direct (linked to the cost of producing a single unit, such as raw materials, plant equipment, labor), and indirect, unlinked to production itself (such as property tax, utility builds, management salaries, and in this case, pensions).
Under the principle that you can't manage what you can't control, the Big 3 have been unable to control a significant cost affecting their bottom line - pensions. It was the UAW leadership's job to anticipate the consequence of their union contract requirements. They failed in their duty. I have absolutely no doubt that the Big 3 management emphasized the cost problems created by trying to compete with Toyata, honda, Nissan (who did not have these union requirements for pensions). I'm sure graphics quickly showed the growing disparity of future earnings between the two. The union leadership made a choice to screw over the future to give to the present.
The big 3 leadership did the same thing in agreeing to those UAW contracts. Rather than strike 'now' (which would have been 'then' in this context, whenever those last contract discussions were), and lose money now, they chose to acquisce and keep making money. It was a bad decision by both parties.
As it turns out, screwing over the future to give to the present is the New American Way... it's a systemic irrationality of our culture now.
The consequence of these failures were postponed by a market that favored large trucks and SUVs, most of which were sold by the US Big 3 (particularly large trucks, unique to needs of the US consumer). As I said in an earlier thread: the large vehicles favored the inefficiencies of the US Big 3 compared to Japanese makers. Producing fewer cars with higher profit margins per unit helped mask the higher labor costs by the US Big 3. The US manufacturers also dominated that market, out-competing with the Japanese. Unfortunately for the US, that all changed this year. Blammo!
2. When anybody tells me that they hate unions, I ask them which of the following they hate so much:
- 40 hour work week
- maternity leave
- workman's comp
- defined benefit pensions
- OSHA - including mine safety
Before unions, there was NONE of that.
(I highlighted 'defined benefit and pensions' because Union adhrence to that is killing unions and businesses alike).
There's no doubt unions were born of serious crimes, both legal and cultural, committed and created by the super-capitalists at the dawn of the industrialized era (the mid 19th century). There's no doubt that my family of middle class Americans owes more to Unions than it owes to any political party or any church.
But evolution applies to everything, always, and the unions are attempting to stop the process of evolution in culture and in business. It has worked for a while, and now it's at the point of no return. Toyota, Honda, etc., are not ignoring any of the things that you speak of in your important list of past union accomplishments. Management evolved. Unions have not.
Because all things evolve over time, it is time for the unions to evolve. Union leadership has to understand the business environment of today. It's essential that union leadership understand the culture of business and competition, more than the culture of turning bolts and running plant machinery.
The great examples of union cooperation (that I know of) are coming from the National Hockey Leage and the National Football League. The caveat is that these are very small unions (in terms of the number of people they represent). These unions, particularly the NFL player's union as led under the late (great) Gene Upshaw, has worked cooperatively with the owners to continue to grow the business while ensuring the most important needs of its membership are taken care of. it's the model for the new century.